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December 28, 2016 5:00 PM, EST

‘K’ Line Files Lawsuit Against APL Logistics for Spreading Rumors

Kiyoshi Ota/Bloomberg News

Kawasaki Kisen Kaisha, Ltd., or “K” Line, filed a lawsuit against APL Logistics Ltd. in a Tokyo civil court for comments the logistics firm made after the Hanjin Shipping Co. demise on Aug. 31.

According to the court filing, APL Logistics employees told “K” Line’s clients on Sept. 20 or 21 that the shipping line would be next in line to go bankrupt and that the shippers should re-book with another ocean carrier. The news eventually spread to the United States and captured attention, even after the logistics firm admitted that “small number” of employees “conveyed opinions to several customers that touch on the potential financial position or viability of “K” Line.”

RELATED: Troubled Hanjin's fleet shrinks to a tenth of its size

APL, which ranks No. 24 on the Transport Topics Top 50 list of the largest logistics companies in North America, retracted the statements, but didn’t issue a formal apology.

“The reputation of “K” Line has been substantially damaged, and “K” Line has suffered considerable damage due to cancellations or suspensions of bookings by clients. “K” Line has decided to file a lawsuit, in order to restore its social confidence and clarify the social responsibility of a company such as [APL Logistics],” the ocean carrier wrote in a statement.

However, the ocean carrier forecasted that it could lose up to $800 million through March 31 due to the poor ocean shipping environment.

“We consider it an urgent management priority to improve our financial strength in light of the current fiscal year’s forecast of a loss attributable to owners of parent,” wrote “K” Line president Eizo Murakami. “Accordingly, it is with sincere regret that the company announces it has decided to pay no interim dividend and has forecasted no year-end dividend for the current fiscal year.”

“K” Line ranks No. 18 on the Transport Topics Top 50 list of the largest global freight carriers.